At a time when allowing foreign players into the retail sector is being hotly debated, the government on Thursday said it would encourage investment in organised retail chains in India.

At a time when allowing foreign players into the retail sector is being hotly debated, the government on Thursday said it would encourage investment in organised retail chains in India.

This was part of steps announced to boost farm goods supply and to bring down prices. "Investment will be encouraged in supply chains, including provisions for cold storages, which will be dovetailed with organised retail chains for quicker, more efficient distribution of farm products and minimising wastage," a government statement said.

The departments of industrial policy and promotion, food and public distribution, the ministry of food processing industries and the Planning Commission will thrash out schemes for this.

At present, FDI in multi-brand retail is prohibited in India but the govt allows 51% FDI in single brand retailing and 100% in wholesale trade.

Domestic traders' lobby groups and Left-wing political parties have for long expressed concern that transnational giants offering deep discount sales in mega stores would put the livelihoods of small shopkeepers and street vendors at risk. However, the department of industrial policy and promotion had floated a discussion paper last July, making a strong pitch for opening the retail sector to FDI.